A place to find news, research and discussion on economic issues related to the impact of globalisation on the environment

Thursday, July 12, 2007

Research Papers: Economic Growth, Trade, and Environmental Quality in a Two-region World Economy

Some theory papers make it onto this blog. What it seems to be saying is that "globalisation is good for the environment" regardless of the trade regime. How to test these predictions - now that is the question.

AbstractThis paper examines the linkages between international trade, environmental degradation and economic growth in a dynamic North-South trade game. Using a neoclassical production function subject to an endogenously improving technology, the North produces manufactured goods by employing labor, capital and a natural resource that it imports from the South. The South extracts the resource using raw labor, in the process generating local pollution. We study optimal regional policies in the presence of local pollution and technology spillovers from North to South under both noncooperative and cooperative modes of trade. Non-cooperative trade is inefficient due to externalities. Cooperative trade policies are efficient and yet do not benefit the North. Both regions gain from improved productivity in the North and faster knowledge diffusion to the South regardless of the trading regime.

About me

This blog is written by Professor Rob Elliott, an academic economist, with an interest in all things international and environmental..I am currently a Professor of International and Environmental Economics at the University of Birmingham..Find me at my homepage.

This weeks read

Following the recent workshop on the "Economics of the Stern Review" and the fuss caused by the "great global warming swindle" this book represents an excellent introduction to the topic. Chapter 6 is the chapter it all hinges upon.